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Some shareholders of Champion Breweries Plc have been kicked against plans by Raysun Nigeria Limited to take over the company, insisting merger is the best option to protect investors and maximise value on investment.

The shareholders have therefore written to the Securities and Exchange Commission (SEC) to stop Raysun Nigeria Limited, which is a subsidiary of Heineken Heineken N.V, majority owners of Nigerian Breweries Plc, from buying out the minority shareholders.

The shareholders are asking that the company be merged with Nigerian Breweries as Heineken did with its previous acquisitions in Nigeria.

SEC recently gave its approval to Raysun Nigeria to proceed with the proposed mandatory takeover offer (MTO) for 1,196,799,164 ordinary shares of Champion Breweries at N2.6 per share. The shares represent the remaining 15.3 per cent stake in the company not owned by the Dutch brewery.

A mandatory offer, also called a mandatory bid, is an offer made by one company (the acquiring company or bidder) to purchase some or all outstanding shares of another company (the target) as required by securities laws and regulations or stock exchange rules.

In a letter to the Commissioner, Compliance, SEC, shareholders under the aegis of Progressive Shareholders Association of Nigeria (PSAN), are calling for the dissolution of the MTO, stating that it did not follow due process and that it is being done in bad faith to delist from the Nigerian Exchange Limited (NGX).

“The core investor has sought an MTO of the Champion Breweries, which may result in the eventual delisting of its shares, a position we feel is detrimental to the interest of the minority investors. It is also our understanding that the SEC approved the MTO without a tender paper indicating the approved buy-back price and other relevant details of the transaction.

“We would like to know what offence the minority shareholders have committed not to be invited to an Extraordinary General Meeting (EGM) where issues on the proposed MTO may have been adequately explained and due process followed to ensure that the interest of the common investor is protected,” PSAN said.

The association, in the letter signed by its National Chairman, Boniface Okezie, said it would want to know why SEC approved MTO where minority shareholders’ interests are at stake.

The shareholders lamented that the regulator is not doing enough to protect minority shareholders, a development, it said, was causing low patronage of the capital market.

PSAN disclosed that Champion Breweries was revived through the efforts of the minority shareholders, including the Akwa Ibom Government, which are about to be denied the benefits of their investments.

Therefore, they resolved to protest the sale of the share, including 11 per cent owned by Akwa Ibom, through MTO.

“We rather propose that a merger between the company and any other suitable match would be a more reasonable approach as has been done in the past by the same core investor instead of delisting the company shares. We request that shareholders be allowed to endorse a potential deal formally at an EGM where all stakeholder interests are represented.

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